Part I.
Enacts Chapter GS 18D, pertaining to Tobacco Products Retail Sales.
Defines thirty terms used in the Chapter. Specifies in GS 18D-101 the powers of the North Carolina Alcoholic Beverage Control Commission (Commission) under new Chapter GS 18D as the following: (1) administer tobacco retail sales under the chapter; (2) provide for enforcement of those laws in conjunction with the ALE Division and (3) issue permits and impose sanctions against permittees. Specifies that the Commission has all other powers which may be reasonably implied from those powers or which are incidental to or convenient for performing the Commission’s duties. Authorizes, in GS 18D-102, the Commission’s employees and licensed alcohol enforcement agents to investigate the operation of each licensed premises for which a tobacco retail sales permit has been issued as described. Specifies that refusal to allow inspection is grounds for discipline under GS 18D-103. Makes it a Class 2 misdemeanor for any person to resist or obstruct an officer attempting to make a lawful inspection.
Lists the administrative penalties that may be imposed by the Commission for violations of GS Chapter 18D, including revocation of the permittee’s permit, suspension of a permit, and/or fines ranging from up to $500 for a first violation to up to $1,000 for a third violation within three years of the first violation in GS 18D-103. Authorizes a compromise of not more than $5,000 in those instances where the Commission is authorized to suspend or revoke a permit. Allows the Commission to accept a compromise and suspend a permit in the same case but prevents it from revoking a permit if a compromise is accepted. Directs that the clear proceeds of any civil penalty be remitted to the Civil Penalty and Forfeiture Fund (Fund). Specifies that suspension or revocation of a permit is grounds for suspension or revocation of any related State or local revenue license. Instructs that unless the Commission provides otherwise, suspension of or revocation of a permit, does not include automatic revocation or suspension, respectively, of any ABC permit held by the same permittee for the same establishment.
Allows the Commission to adopt, amend, and repeal rules to carry out the provisions of GS Chapter 18D. Provides for the applicability of the administrative procedures act (APA), as specified.
Makes it unlawful under GS 18D-200 for a person, that is not a delivery service making deliveries on behalf of a permit holder, to sell a tobacco product to a consumer in the State without a permit.
Provides for the disposition of tobacco products by law enforcement officers who seize those products as evidence of a tobacco retail sales violation under GS 18D-201, including: (1) storage of the seized goods until the end of the applicable hearing; (2) disposition of the seized goods by court order as described upon notice to a defendant, to other known owners, and the Commission; and (3) disposition by court order as described after the criminal charge is resolved. Prevents the court from ordering disposition of the seized goods if they are also needed at an administrative hearing. Authorizes the Commission to take any of the actions a court may have taken under prongs 1 and 2, above after an administrative hearing. Prevents Commission from destroying any seized products if no criminal proceedings have commenced until notice has been given to the district attorney for the district where the goods were seized. Specifies that any sales will be by public auction. Provides for segregation and disposition of sales as described. Authorizes four listed categories of persons to bring a superior court action in the county where the tobacco products were seized, including, a persons claiming to be the owner of wrongfully held tobacco products, persons claiming to be entitled to sale proceeds of the tobacco products seized, and persons claiming to be entitled to restitution for tobacco products wrongfully destroyed.
Provides for forfeiture of tobacco products possessed or sold in violation of the tobacco retail sales laws in GS 18D-202. Clarifies that tobacco products which may be possessed lawfully are not subject to forfeiture when they were used unlawfully by someone other than the owner of the tobacco products and the owner did not consent to the unlawful use. Authorizes application to judge for an order authorizing seizure of the products if they have not already been seized. Directs that such an order can only be issued after criminal process has been issued for tobacco retail sales violation in connection with the product. Provides for safe storage until trial. Allows the presiding judge in a criminal proceeding to take any of five described actions after resolution of a charge against the owner or possessor of the tobacco product subject to forfeiture. If the judge orders forfeiture, authorizes the judge to also order any of the following dispositions: (1) sale at public auctions to a tobacco manufacturer, wholesaler, or retailer sales permittee or (2) destruction if possession of the product would be unlawful or sale or other disposition is impracticable. Provides for distribution of sale proceeds, including to persons who hold a security interest in the seized tobacco but who did not consent to the unlawful use of the tobacco. Provides for an in rem action when the owner is unknown and forfeiture is sought. Allows any owner of a seized tobacco product seized for forfeiture to apply to a judge to have the product returned if no criminal charge has been made in connection within a reasonable time after seizure. Prevents return of the seized goods if it would be unlawful.
Specifies seven requirements for a tobacco retail sales permit under GS 18D-300 including (1) that the person be at least 21 years of age; (2) not have been convicted (defined) of certain crimes or tobacco retail offenses within certain time periods; (3) be current in all applicable State tax returns and in payment of all taxes, interest, and penalties that are collectible under GS 105-241.22. Allows the Commission to decline to take action against a permittee who may have incurred any of the convictions or violations described in prong 2, above. If the permittee is a business, specifies that each of the eight classes of listed persons must qualify for a retail sales permit, including the owner of a sole proprietorship, each member of a firm, association, or general partnership, each general partner in an limited partnership, each manager and any member with a 25% or greater interest in an LLC, and each officer, director, and owner of 25% or more of the stock of a corporation except that those persons don’t have to be 21 unless they are a manager or is otherwise responsible for the daily operations of the business.
Requires the Department of Revenue (DOR) to provide information to the Commission to confirm current tax status. Allows the Commission to take disciplinary action against a permittee if DOR informs it that the person is not current on their taxes as detailed above. Specifies that disciplinary action can only last until the Commission receives notice from DOR that the person is now current. Allows the requirement to pay all taxes, interest, and penalties to be satisfied by an operative agreement under covering any amounts that are collectible under GS 105-241.22. Specifies that GS Chapter 150B (the APA) does not apply to a Commission action on issuance, suspension, or revocation of a tobacco retail sales permit for taxes.
Specifies that the Commission is the only entity authorized to issue a tobacco retails sales permits in GS 18D-301. Requires the Commission to consider three factors, as described, of the applicant and business location, including the reputation, character, and criminal record of the applicant and whether the retail seller’s operation would be detrimental to the surrounding neighborhood. Allows the Commission to determine the suitability and qualifications of an applicant for a permit along with the suitability of the location to which the permit may be issued.
Requires, in GS 18D-302, the Commission to investigate the applicant (and the premises for a retail seller permit) with the assistance of the ALE Division as described, before issuing a permit. Provides for an application form, fingerprinting, and a criminal record check. Requires such information to be kept confidential and specifies that the information is not a public record. Allows the State Bureau of Investigation to charge a fee to the applicant for the criminal records check. Makes knowingly making false statements on applications unlawful and grounds for discipline including, denial, suspension or revocation of a permit. Provides for nonrefundable $400 application fee for each type of permit (retail seller, delivery seller, and remote seller). Requires all application fees to be remitted to the State Treasurer for the General Fund.
Specifies in GS 18D-303 that once issued, permits are valid for up to one year (May 1 to April 30). Sets nonrefundable renewal fees in the same amount as those provided for in GS 18D-302. Prevents the Commission from revoking a permit for failure to pay a renewal fee until June 1 of the year the payment is unpaid. Provides for notice to permittees with unpaid renewal fees. Requires the Commission to impose a 25% late fee.
Prevents permits from being transferred from one person to another or one location to another, except as described below. Provides for automatic expiration of the permit and surrender of the permit to the Commission if there is a change in ownership of the permittee as described. Allows a person, who, through contract, lease, management agreement, or change of ownership or transfer of business becomes lawfully entitled to use and control of the premises of an establishment that holds permits immediately prior to such change of ownership may continue to operate the establishment, as successor to the prior permittee, to the same extent as the predecessor permittee until the person receives a temporary or new permit, subject to the five listed limitations. Specifies conditions under which transfer to a trust would not constitute change in ownership. Requires corporations to submit an application for a substitute manager if there is a change in managers of any person who is required to qualify as an applicant within the time and under the conditions specified. Provides for duplicate permits if they are lost, stolen, or if the permittee’s name or business name is changed, subject to a $10 fee.
Enacts GS 18D-304, containing miscellaneous provisions, including the following. Instructs that a retail seller permit authorizes the sale of tobacco products only in the physical presence of the consumer on the fixed premises of the establishment located in the State and named in the permit. Directs that a delivery seller permit authorizes a delivery sale only, originating either inside or outside of the State. Requires a remote seller permit to authorize a remote sale only, originating either inside or outside of the State. Provides for prominent posting of the permit on the premises. Prevents a tobacco retail sales permit from being issued to a business on the campus or property of a public school, college or university. Requires the Commission to send notice of the issuance of a permit with the name and address of the permittee and establishment to the three listed agencies.
Provides for temporary permits as described in GS 18D-305. Allows for electronic submission of payments and forms in GS 18D-306. Authorizes applications for permits under GS Chapter 18D to be filed simultaneously or in conjunction with applications for ABC permits under GS Chapter 18B in GS 18D-307.
Specifies in GS 18D-400 that a permittee is responsible for the entire premises where a permit is issued as well as the actions of all of their employees, as described. Prevents permittees from knowingly employing any person whose license under GS Chapter 18D has been revoked in the past 18 months. Requires employees and agents of permit holder to demand proof of age from prospective purchasers if they have reasonable grounds to believe the person is under 30 years of age. Requires delivery sellers and remote sellers to (1) perform an age verification through an independent, third-party age verification service that compares information available from public records to the personal information entered by the individual during the ordering process to establish that the individual ordering the tobacco products is 21 years of age or older and (2) use a method of shipping, mailing or delivery that requires a signature of a person at least 21 years of age before the product is delivered. Provides for required training of employees or agents of retail sellers by the employer. Provides for display of a consumer statement as described.
Prevents four types of conduct from occurring on licensed premises in GS 18D-401, including fighting or disorderly conduct, violations of GS Chapter 18D, or violations of the controlled substances, gambling, or prostitution statutes, or any other unlawful acts. Directs that it is unlawful for a permittee to fail to superintend in person or through a manager the business for which a permit is issued.
Enacts GS 18D-402, containing miscellaneous tobacco sales provisions preventing six described courses of conduct, including selling tobacco products through displays accessible to the public without the assistance of a permittee's employee or agent other than in an establishment open only to persons 21 years of age and older.
Makes it a Class 2 misdemeanor for any person to sell, aid, assist, or abet any other person in selling tobacco products to any person under the age of 21 years, or for any person shall purchase tobacco products on behalf of a person under the age of 21 years in GS 18D-500. Exempts sales of tobacco products to an employee or agent of a tobacco retail sales permittee under the age of 21 years when possession of the tobacco product is required pursuant to a tobacco retail sales permit in the performance of that person's duties of employment or contract.
Makes it a Class 2 misdemeanor for any person under the age of 21 to present or offer false, fraudulent, or the identification of another to purchase or receive tobacco products in GS 18D-501. Makes all other purchases or attempts at purchase of tobacco purchase by those persons an infraction which may require completion of a tobacco education program as described. Provides that it is not unlawful for an employee or agent of a tobacco retail sales permittee under the age of 21 years to accept receipt of, sell, transport, possess, or dispense tobacco products when required pursuant to a tobacco retail sales permit in the performance of that person's duties of employment or contract, if the employment of the person for that purpose is lawful under applicable youth employment statutes and Commission rules. Provides for aiding and abetting liability in GS 18D-502 in the punishment classes as described.
Provides for persons under age 21 to be lawfully enlisted by any of the following and under the described conditions in GS 18D-503:(1) law enforcement, including the Division of Alcohol Law Enforcement, to test compliance if the testing is under the direct supervision of that law enforcement department and written parental consent is provided; (2) DHHS pursuant to a written plan to use persons under age 21 in in annual, random, unannounced inspections, so long as parental consent is given; and (3) a research program affiliated with an accredited community college, college, or university located in this State to test compliance as part of a scientific research study to further efforts in underage tobacco use prevention, provided that prior written parental consent is given for persons under 18 years of age.
Specifies three defenses to violations of GS 18D-500 under circumstances where the seller: (1) demonstrates the purchaser produced identification showing the person’s age to be the required age and bearing a physical description of the person named on the identification reasonably describing the purchaser; (2) produces evidences of other facts that reasonably indicated at the time of sale that the purchaser was at least the required age; and (3) evidence that at the time of sale the purchaser utilized a biometric identification system that demonstrated their age to be at least 21 and that they had registered an official federal or State ID with the seller or the seller’s agent showing them to be the legal age for purchase. Allows for deferred prosecution or conditional discharge under GS 18D-505 under the conditions described.
Provides for restitution as specified in GS 18D-600. Specifies that unless otherwise specified, any violation of GS Chapter 18D is a Class 1 misdemeanor, and authorizes the Court to impose the provisions GS 18D-201 (seizure), GS 18D-202 (forfeiture) and GS 18D-600 (restitution), in GS 18D-601.
Enacts GS 18D-700, concerning certification and directory of vapor products and consumable products, as follows. Requires the Secretary of DOR to certify vapor products and consumable products eligible for retail sale in the State and list them on a directory as required by Part 3 of Article 4 of GS Chapter 143B. Sets forth the following penalties for violations of the above:
- A retailer, distributor, or wholesaler who offer for sale a consumable product or vapor product intended for ultimate retail sale in this State that is not included in the directory is subject to a warning with a mandatory reinspection of the retailer within 30 days of the violation.
- For a second violation of this type within a 12-month period, the fine will be at least $500 but not more than $750.00 and, if licensed, the licensee's license will be suspended for 30 days.
- For a third or subsequent violation of this type within a 12-month period, the fine will be at $1,000 but not more than $1,500 and, if licensed, the licensee's license will be revoked.
Provides for seizure, forfeiture, or destruction upon a second or subsequent violation of the above, as described.
- A manufacturer whose consumable products or vapor products are not listed in the directory and who causes the products that are not listed to be sold for retail sale in North Carolina, whether directly or through an importer, distributor, wholesaler, retailer, or similar intermediary or intermediaries, is subject to a civil penalty of $10,000 for each individual product offered for sale in until the offending product is removed from the market or until the offending product is properly listed on the directory. In addition, any manufacturer that falsely represents any information required by a certification form is guilty of a misdemeanor for each false representation.
Authorizes the State to recoup costs, including the costs of investigation, expert witness fees, and reasonable attorneys' fees. Specifies that repeated violations of Part 3, Article 4 of GS Chapter 143B is an unfair and deceptive trade practice.
Part II.
Repeals GS 14-313, which concerned access to tobacco products, alternative nicotine products, vapor products, and cigarette wrapping papers by persons under age 18. Makes conforming changes in GS 7B-2508.1; GS 14-50.16A, GS 15A-150, GS 75D-3, and GS 105-113.4F. Replaces references to GS 14-313 with the appropriate new statutory references in GS 143B-245.10, GS 143B-245.11, GS 143B-245.14, GS 105-113.4F, and GS 143B-245.16.
Amends GS 15A-145, to allow a person who has not been previously convicted of any felony, or misdemeanor other than a traffic violation, who pleads guilty to or is guilty of the offense of the sale of a tobacco product to a person under age 21 to file a petition for expunction. Allows the petition to be restored in such cases when the court fines that the petitioner has remained of good behavior and been free of any felony or misdemeanor, other than a traffic violation, for two years from the date of conviction, and the petitioner has no outstanding restitution orders or civil judgments representing amounts ordered for restitution entered against him. Makes language gender neutral.
Expands upon the duties of the ABC Commission (Commission) under GS 18B-203 to include: (1) providing for the enforcement of the tobacco retail sales laws in GS Chapter 18D, in conjunction with the ALE Division, and issuing tobacco retail sales permits and imposing sanctions against permittees as set forth in GS Chapter 18D. Makes technical changes.
Amends GS 18B-500 to alcohol law-enforcement agents authority to arrest and take investigatory and enforcement actions for criminal offenses while investigating or enforcing GS Chapter 18D; specifies that their primary responsibilities include enforcement of the Chapter.
Enacts new GS 18B-908 allowing applications for permits under GS Chapter 18D to be filed simultaneously or in conjunction with applications for tobacco retail sales permits, including allowing the Commission to combine them into a single application. Allows the Commission to use, rely upon, or incorporate by reference any information an application for a permit under GS Chapter 18B has submitted in conjunction with a tobacco retail sales permit.
Amends GS 143B-245.10 by updating the definition of timely filed premarket tobacco product application; makes other conforming and technical changes, including updating statutory cross-references.
Part III.
Specifies that prosecutions for offenses committed before the effective date of this act are not abated or affected by this act, and the statutes that would be applicable but for this act remain applicable to those prosecutions.
Allows the ABC Commission, effective March 1, 2026, to issue tobacco retail sales permits as authorized by Section 1 of this act effective for the period of May 1, 2026, through April 30, 2027.
Makes GS 18D-100, GS 18D-101, GS 18D-104, GS 18D-300 through 18D-302, and GS 18D-304 through 18D-307, as enacted by Section 1 of this act, effective when this act becomes law and applicable to permits effective on or after May 1, 2026. Makes the remainder of Sections 1 through 3 of this act effective May 1, 2026, applicable to offenses committed on or after that date. The remainder of this act is effective when it becomes law.
Bill Summaries: S318 (2025-2026 Session)
Tracking:
-
Bill S 318 (2025-2026)Summary date: Mar 17 2025 - View summary